Analysing a tender request
The first step in developing a tender response is to examine the tender request. You need to decide whether the opportunity is a good fit for your business, and whether or not to invest further time, money and resources into developing a tender competitive response.
How to analyse a tender request
Use the checklist below to analyse tender requests, and decide whether or not to make an official tender response. This is an important decision to make. Developing a tender will cost money and use valuable resources, and abandoning the development of the tender at a later stage can have serious consequences for your business (especially if you are a small business).
Tender analysis checklist
About the tender
|What goods or services is the buyer seeking to purchase?|
|What are the evaluation criteria?|
|What are the key dates?|
|What are the submission requirements?|
|Do any key sections of the tender specification need highlighting for further discussion or clarification?|
About the buyer
|What are the buyer's key requirements?|
|Does my business have any existing business relationships with the buyer?|
|Does the business understand the policy environment that the buyer operates in?|
About my business
|Is this tender a strategic fit for my business?|
|What are my business's strengths? What are my competitors' strengths?|
|Can I demonstrate a track record of previous successful tender delivery?|
|What is my initial estimation of cost to bid for this tender?|
|What is our potential profit from winning the tender?|
|What resources do we require to bid and deliver a winning tender?|
Tips for analysing a tender
- If you can't deliver, don't bid.
- Don't assume that existing suppliers will automatically win the tender when a contract comes up for renewal.
- Make sure a contract notice really is a tendering opportunity, and not a request for quotation.
- Don't take on too many tender opportunities at once. It's best to concentrate on tenders that are most likely to yield results.
- Check the size of the contract (if available) against your turnover. Sometimes if the contract value is more than 20% of business turnover, that could count against you in the assessment of your tender response.
- If you can, consider nominating a staff member to look for tender opportunities. Be sure to give them enough time for this important activity.
- You may find that you can submit a strong tender response, but that actually delivering the tender will only make a small profit or no profit at all. Normally you would discount these types of opportunity. However, if the opportunity fits with your business's long-term strategy and delivering the tender would not cause financial issues for the business, then you should consider submitting a tender response. Known as 'loss leader tendering', this strategy gives you access into a new market (or the chance of building a new business relationship with a new customer).
- Be aware that taking on the process of a new tender may put a strain on your existing business resources. It is important to ensure that winning new tenders does not affect delivery of your existing contracts.
- Last reviewed: 09 May 2016
- Last updated: 20 Jun 2017